DFCU Financial is buying Winter Park National Bank in suburban Orlando, Florida, its second whole-bank deal in the state in as many years, as the Dearborn, Michigan-based credit union adds scale and continues its build-out in the Sunshine State.
It's the 20th deal this year involving a credit union buying a bank, extending a record run that is likely to continue into 2025. Credit unions have been making these acquisitions to diversify into business lending and expand their footprints.
The all-cash bid for the $845-million asset Winter Park National would give DFCU two branches in central Florida, one each in the Orlando suburbs of Winter Park and Longwood, and a commercial loan book.
In 2023, the $6.6 billion-asset DFCU bought First Citrus Bancorporation in Tampa and acquired two branches from
Winter Park National "has been a cornerstone of the Central Florida financial community, and we look forward to building on their legacy," DFCU President and CEO Ryan Goldberg said in a press release Friday announcing the deal.
DFCU did not disclose financial terms of the acquisition, which it expects to finalize in 2025.
The credit union said Winter Park National CEO David Dotherow would join the combined organization as the Central Florida president.
"Together we look forward to strengthening relationships with our clients and reaching new customers across the region," Dotherow said in the release. Winter Park National
Credit union-bank mergers have accounted for nearly a fifth of deal activity in the banking industry this year. In 2023, there were 11 such deals and the previous record was 16 set in 2022.
Mike Bell, an attorney with the law firm Honigman in Michigan who advised DFCU, is the most prolific deal broker in the credit union M&A arena. He projected that these deals would continue at a record pace in 2025.
"I've never been busier," Bell said.
At least 100 banks this year announced plans to sell through October. Those deals carried an aggregate deal value of more than $11 billion, according to S&P Global Market Intelligence.
Bell said falling interest rates and President-elect Donald Trump's deregulation vows for his
The Federal Reserve cut its benchmark rate by 50 basis points in September and by
Credit union-bank deals, however, have drawn criticism. The Independent Community Bankers of America said credit unions are exempt from federal taxes to allow them to cater to underserved consumers or remote markets. When they buy banks, they move beyond their missions and simultaneously remove tax revenue and competition from communities, the ICBA said.
Earlier this year, the Federal Deposit Insurance Corp., which supervises a large share of the nation's small banks, approved a new statement of policy on mergers that for the first time explicitly stated additional scrutiny may be needed for deals involving credit unions.
"To remedy this increasingly concerning trend, ICBA and community bankers continue our calls for Congress to hold hearings and to consider an exit fee on credit union acquisitions of tax-paying banks to capture lost tax revenue resulting from these deals," ICBA President and CEO Rebeca Romero Rainey said in a statement.
"This needed policy change is in line with previous banking industry reforms. In 1951, Congress revoked the tax exemption for building and loan associations, cooperative banks, and mutual savings banks, finding that these institutions operated much like commercial banks and should be taxed accordingly," she said. "Congress should investigate the outdated credit union policies and whether the government should continue subsidizing community banking consolidation."
